Israel's defence minister Ehud Barak has made the surprise announcement that he is quitting politics.

However, Mr Barak says he will stay on in his post until the next government is formed after the national election in January.

The 70-year-old says he feels it is time to allow other people to serve in senior government roles.

Mr Barak, a former prime minister, has been defence minister since 2007 and has been the architect of Israel's tough policy on Iran's nuclear program.

"I have decided to resign from political life and not participate in the upcoming Knesset elections," Mr Barak said.

"I will finish my duties as defence minister with the formation of the next government in three months.

"The Iranian issue remains very important, even after I leave my position in three months. It will remain a central issue on the agenda."

In a statement, prime minister Benjamin Netanyahu said he "respects defence minister Ehud Barak's decision and thanks him for his cooperation in the government and highly appreciates his long-standing contribution to the security of the state".

Mr Barak's announcement came as political observers had speculated the long-time politician would announce he was joining another political party ahead of the January 22 elections.

Many suspected he might pair up with former foreign minister Tzipi Livni to run on a centrist ticket, after she quit the centre-right Kadima party following her loss in a primary vote.

But few believed Mr Barak would announce he was quitting political life altogether, in a decision that caps a tumultuous year for him.

In January, he resigned from the Labour party where he had spent his entire political life, leading his newly-formed Independence faction into the government of Mr Netanyahu.

He had taken the Labour party into the coalition against the wishes of many of its members, who objected to the hawkish bent of Netanyahu's government.